While the Food and Drug Administration has successfully prevented 137 drug shortages since the beginning of 2010, drug shortages have been increasing in frequency and severity in recent years and adversely affecting patient care.A small number of drugs in the U.S. experience a shortage in any given year, but the number of reported prescription drug shortages in the United States nearly tripled between 2005 and 2010, going from 61 to 178. There are many causes and potential solutions to this challenge and addressing this significant public health problem will require the urgent attention of industry, other stakeholders, and government.

Today, President Obama issued an Executive Order directing the FDA and Department of Justice to take action to help further reduce and prevent drug shortages, protect consumers, and prevent price gouging. These additional steps for early notification will help achieve some of the goals of bipartisan legislation in Congress, which the President supports, that will strengthen the FDA’s ability to prevent prescription drug shortages in the future.

The Executive Order is one in a series of steps that will help address the shortage of prescription drugs and ensure patients have access to the lifesaving medicines they need. Today, the Obama Administration also:

Sent a letter to drug manufacturers reminding them of their legal responsibility to report the discontinuation of certain drugs to the FDA. The letter also encourages companies to voluntarily notify FDA about potential prescription drug shortages in cases where notification is not currently required.

Increased staffing resources for the FDA’s Drug Shortages Program to address the increased workload that will result from additional early notification of potential shortages by manufacturers.

Released a report from the Department of Health and Human Services Office of the Assistant Secretary for Planning and Evaluation (ASPE) that assesses the underlying factors that lead to drug shortages, and an FDA report on its role in monitoring, preventing, and responding to these shortages.

Watch the following short video of why cancer patients can't wait

CBS News Report on Drug Shortages and the Gray Market

In the CBS news report they focus on the gray market, and several companies that anticipate shortages, hoard live saving medicines and then sell those medicines at incredible mark ups. CBS reported that in Miami, a company called Allied Medical Supply sells Cytarabine - a drug to treat leukemia and typically sells for $12 a vial, is offered to hospitals for nearly $1,000 by Allied Medical Supply.The US Congress and the FBI have initiated investigations into US Drug Shortages.

Rx-360 has previously presented and publicized that during shortages, opportunities are presented for noncompliant companies, unethical players and even criminals to enter the supply chain and introduce substandard, contaminated, adulterated and even counterfeit materials, often with tragic consequences. In fact, shortage of raw material in China was one of the contributing factors in the economically motivated adulteration of Heparin which led to numerous deaths in the USA and Europe.

With the current shortages of drugs in the USA, the Institute for Safe Medication Practices has issued a safety alert based on their survey of 549 hospitals, indicating widespread accounts of frustration, outrage, and serious compromises to patient care. To view the survey, click here

According to the press release from ISMP: "When critical medications become scarce and are no longer available through a hospital’s usual channels of distribution, unscrupulous gray market distributors have been quick to jump in with inexplicably obtained supplies of these drugs that they are more than willing to sell to healthcare providers at exorbitant costs. Capitalizing on the desperation of pharmacy directors and buyers, these distributors have been unrelenting in their quest to make huge profits by supplying hospitals with lifesaving medications that are otherwise unavailable."

See ISMP's "Managing the drug shortage crisis" for suggested actions, including a template of a failure mode and effects analysis to promote safe use of alternative drugs used during a drug shortage by clicking here

Rx-360 also published an editorial calling for stricter criminal penalties for economically motivated adulteration, counterfeiting and other nefarious activities. The editorial stated "Looking at events over the past several years, it is clear - unethical individuals and criminals are present in the pharmaceutical supply chain. The reason for this growing phenomenon is simple “greed”. Unethical individuals and criminals have learned that selling substandard, adulterated or counterfeit medicines is highly profitable and involves very little if any personal risks." The entire editorial can be read by clicking here

Drug shortages, especially for medication in high demand, result in a key vulnerability within the supply chain. When a drug is in short supply for any reason, the door opens for opportunistic third tier wholesalers and distributors to seek out and purchase the remaining supply from any source at higher prices than usual, passing along these price increases to hospitals and out-patient providers at extreme markups. This is also a significant opportunity for someone to try and “fill the pipeline” with counterfeit or diverted product. A drug shortage can also lead to previously stolen or adulterated product getting back into the legitimate supply chain. Everyone in the supply chain must be aware of the risks and be vigilant of supply chain vulnerabilities in the face of a drug shortage. This paper reviews some potential mitigation steps for companies to consider if they have a drug shortage.

Please click here to access the full text of the Drug Shortages whitepaper.

The occurrence of shortages of medicines has increased over the last few years. The paper identifies the globalisation of manufacturing and supply chains as a major contributing factor to the occurrence of supply shortages. It also includes a number of activities to encourage more active risk management by the pharmaceutical industry, reducing the vulnerability of supply chains.

The reflection paper was developed by the Agency in collaboration with the European medicines regulatory network, including the European Commission and regulatory authorities in the European Union (EU) Member States.

The Agency plays a key role in the harmonisation and co-ordination of activities related to GMP in the EU. It is involved in coordinating the preparation of new and revised guidance on GMP, coordinating advice on the interpretation of EU GMP requirements and related technical issues, and developing EU-wide procedures relating to GMP inspections.

American patients and doctors currently confront an unprecedented shortage of critical drugs. The widespread shortages are causing inferior treatment regimens, interruptions in care, higher health care costs, and even premature death. The drugs in shortage are mostly generic injectable medications, many of which have been on the market for decades. Although the shortages have been attributed to a myriad of factors from a lack of raw materials to increased demand, information obtained by the Committee on Oversight and Government Reform shows that the crisis was largely sparked by actions of the Food and Drug Administration (FDA). The Committee has learned that FDA regulatory activity has effectively shut down 30% of the total manufacturing capacity at four of America’s largest producers of generic injectable medications: Bedford Laboratories, Hospira Pharmaceuticals, Sandoz Pharmaceuticals, and Teva Pharmaceuticals. Of the 219 drugs listed on the American Society of Health System Pharmacists (ASHSP) shortage list as of February 21, 2012, at least 128 – 58% of the drugs on the shortage list – were produced by at least one facility undergoing FDA remediation.

The drug shortage crisis that took off in 2010 began shortly after Margaret Hamburg became FDA Commissioner. Since this time, the FDA has failed to ensure that enforcement and compliance activities are conducted in a manner that does not create unnecessary shortages of critical drugs. In response to FDA prodding, companies producing generic injectable drugs have taken their manufacturing off-line simultaneous to other generic competitors also going off-line. These simultaneous shutdowns diminish the ability of competitors to alleviate the shortages with increased production. Last year, a report from the Assistant Secretary for Planning and Evaluation at HHS acknowledged the risk from shutting down manufacturing lines:

This temporary closure of a large manufacturing facility can also lead to other facilities being unable to meet the increased demand for the drug due to the lack of excess capacity and the pressure of ramping up supply for multiple drugs in other facilities.

Among shuttered manufacturing lines that occurred over the previous two years, the committee’s review did not find any instances where the shutdown was associated with reports of drugs harming customers.

When problems that do not pose an immediate threat to public safety are detected, directing facilities to make targeted improvements under close supervision of the FDA can be a more appropriate response than actions that lead companies to shut down manufacturing lines. While such a response may place inconvenient burdens on the FDA’s bureaucracy, greater use of such a targeted approach would have significantly diminished the public health crisis the country is facing from the abundant number of drug shortages. It is noteworthy, however, that the overall damage inflicted by the FDA’s decisions to shutter manufacturing lines may extend well beyond the current drug shortage crisis. The shortages of generic injectable drugs are only the most visible result thus far of the FDA’s stepped up enforcement activities.

While FDA actions over the past several years are the primary reason for the severity of the drug shortage crisis, the Committee also found that growing market concentration over the past decade laid the groundwork for the crisis. One contributing factor to the growing market concentration is a provision of the Medicare Modernization Act (MMA) which dramatically reduced the prices paid by Medicare for many generic injectable medications, particularly older generics. Manufacturers are reluctant to raise prices above what Medicare reimburses providers who administer them. As a result, the Committee has learned that manufacturers are losing money producing generic injectable oncology drugs. When manufacturers lose money on a product, they are incentivized to switch production away from that product. Therefore, it is not surprising that many of the drugs on the shortage list are generic oncology drugs. A recent economics research paper found that drugs more affected by the MMA are much more likely to be in short supply than drugs less affected by the MMA.

Group purchasing organizations (GPOs) have also contributed to a market structure that makes shortages more likely. GPOs, which emerged as a mechanism for providers to increase their buying power, assemble large networks of hospitals and clinics who agree to purchase drugs through a GPO. GPO contracts, which are structured to take advantage of large economies of scale in drug production, result in only a few large manufacturers producing each generic injectable medication. Because of intense manufacturer competition to win GPO contracts, prices are driven down – the intended goal. As a consequence, however, companies that cannot produce a drug at large enough output levels to take advantage of the economies of scale – often because they lack the guaranteed source of demand that GPOs provide – will stop producing the drug or will neglect to enter the market.

Largely because of GPO contracting and the MMA’s impact on changing Medicare’s reimbursement formula for injectable medications, individual generic injectable drugs are being produced by at most three companies. In 2010, 90% of generic injectable oncology drugs were produced by three or fewer manufacturers. In such a tight oligopoly, the temporary closure of a significant number of the production lines in one or two manufacturers’ facilities makes shortages much more likely.

Although the drug shortage crisis is likely to continue until manufacturers bring their facilities back on line, policymakers can take action to guard against future crises. Most importantly, a common sense regulatory approach must be restored at the FDA. Agency protocols should be revised so that the agency is required to consider the implications of its actions on the nation’s supply of critical drugs. In addition, the drug shortage crisis has shed greater transparency on the dysfunctional price system that governs generic injectable medications. To improve the price mechanism, Congress should reform the way that Medicare pays for drugs so the program’s reimbursements better reflect actual supply and demand conditions in the market. In the meantime, proposals to allow drug companies to share information about each other’s manufacturing capability and product availability may have merit because of the extraordinary circumstances of the present crisis. However, this type of information sharing potentially places consumers at risk of collusion by the large manufacturers.

The American Hospital Association and 19 other groups on Friday weighed in on the U.S. Food and Drug Administration user fee bill, asking lawmakers to slap drugmakers with a fine for failing to comply with the bill's proposed drug shortage provisions.

Differences between the U.S. Senate and House of Representative versions of the must-pass user fee legislation are currently being worked out by the bills' sponsors in an informal conference committee. The health care lobby has been weighing in publicly and privately on what the lawmakers should keep or scrap in the final bill.

The letter from the AHA, along with groups representing doctors, pharmacists and patient advocates, touched largely on the bills' drug shortage provisions. Both bills would require pharmaceutical makers to notify the FDA six months in advance of any manufacturing, importation or other problem that could lead to a drug shortage.

Although some lawmakers attempted to include financial penalties for failing to comply with the requirements, such provisions didn't make it into either bill.

The groups said that fines would be the best enforcement, but ceded that they could live with lesser penalties. They said they would support a provision in the House bill that would require the FDA to send a warning letter to noncompliant companies, demanding an explanation as to why they failed to notify the agency.

“As these letters and responses would be a matter of public record, as are other FDA enforcement actions, manufacturers would be held accountable for justifying failure to report a stoppage in production of a life-saving product that could result in patient harm or death,” the groups said.

Sen. Richard Blumenthal, D-Conn., had offered amendments that would impose a penalty of up to $10,000 a day and up to $1.8 million total on companies that knowingly failed to submit the required notifications to the FDA.

“Notification is fine, but it will be less effective if there are no penalties for failure to notify,” Blumenthal said on the Senate floor in May. “And we may try to walk a balance between enforcement and incentives, but enforcement in this area is critical, and this measure imposing penalties for failure to notify is critical as well. The amendment is a fair one.”

Senate leadership, however, dropped Blumenthal's amendment and it never saw a vote. The bill's sponsors wanted to limit amendments, especially those that the industry might oppose, as much as possible in order to ensure quick passage.

Shortages of medications, especially cancer treatments, have spiked in recent years, with more than 250 reported in 2011, up from 61 in 2005.

The user fee bill, which authorizes the FDA to collect billions of dollars from the pharmaceutical, device and generics industries over the next five years and also makes a host of reforms to the FDA, passed both houses overwhelmingly. The bills' sponsors, from both parties and both houses, are now working to reconcile their differences, with the goal of getting a final bill on the President Barack Obama's desk by July 4.

The letter was signed by the AHA, the American Society of Clinical Oncology, the National Community Pharmacists Association and others. Link to Original

May 3, 2012 Update

Six Month Check-Up: FDA’s Work on Drug Shortages

This week marks the six-month anniversary of President Obama signing an Executive Order to help FDA in our ongoing efforts to prevent and resolve prescription drug shortages. At FDA, we saw the Executive Order as an important step in bringing awareness to this critical public health issue and signaling the necessary tools and resources, such as early notification and additional staff, FDA must have to help address this problem. Following the Executive Order, we sent out letters to drug manufacturers asking them to voluntarily report to FDA if they saw the emerging potential for a drug shortage.

Six months later, I am both amazed and delighted to see the progress that’s been made. Early notification to FDA of potential disruptions in drug supply has made a huge difference in our efforts – and the numbers really tell the story. Since reaching out to industry, there has been a six-fold increase in early notifications from manufacturers. Also in that six month timeframe, we have been able to prevent 128 drug shortages, and we’re seeing fewer numbers of shortages occur – 42 new drugs in shortage reported in 2012, compared to 90 new shortages at this time last year. This data is a testament to how FDA exercises flexibility and discretion in much of our work on drug shortages and the importance of strong collaboration and constant communication with industry, health professionals, and patients.

But these are simply statistics. Consider instead the impact of our work on patients, who need particular drugs to treat life-threatening diseases. For instance, supplies of methotrexate, a cancer drug used to treat childhood leukemia and osteosarcoma, are currently meeting all demand, and we do not expect any further supply issues.

Also, to address the shortage of Doxil (liposomal doxorubicin), a drug used for ovarian cancer and other cancer regimens, FDA exercised enforcement discretion for the importation of Lipodox, another brand of liposomal doxorubicin, from India, meeting patient needs until Doxil is available again.

While many shortages of cancer drugs are resolving, we are still working hard to address others. Leucovorin injection, a cancer drug that is used along with methotrexate for children with a serious form of leukemia, has been in short supply for some time. We are working with the manufacturer, Teva Pharmaceuticals, to produce additional shipments in the coming weeks to help improve supplies.

Mustargen (Mechlorethamine HCl) – another cancer drug used in multiple cancer regimens — has also been in shortage. FDA has worked with the manufacturer to resume production of Mustargen, and the company is planning to have product available again by August.

We are equally concerned about other types of drugs in shortage. Anesthesia drugs, such as benzodiazepines and fentanyl injections, have recently been in short supply. Here again, early notification is helping. One manufacturer, Hospira, notified FDA of anticipated delays in supply of the critical anesthesia drug propofol. This advanced notice allowed FDA to work with the other manufacturer of propofol who was able to increase supplies to keep the product available for patients undergoing surgery.

Drug shortages remain a serious, complex problem, and the agency remains extremely concerned about all current and potential drug shortages, not just those that I mentioned. Our efforts require a multifaceted approach involving industry, regulators, payers, and others. And we’re working with Congress on bipartisan legislation to expand early notification of drug supply problems that could cause shortages. All of us have a responsibility to help ensure that patients have reasonable access to the drugs they need. Drug manufacturers in particular have a responsibility to manufacture quality drugs and to have a process to ensure supply continuity of critical drugs.

In a blog I wrote earlier this year, I reminded readers that “the critical issue of drug shortages isn’t about industry; it isn’t about government, or even about the drugs themselves. It is about getting people the treatments they trust, they need, and they rely on.” While that remains as true as ever, I would like to add a different kind of reminder. Today’s six-month check-up demonstrates what government and industry can accomplish when we work together. While there’s no simple solution, we are making progress. And we’ll remain vigilant – doing all we can and using every resource available – to make sure patients have access to the critical medicines they need, when they need them.

Margaret Hamburg, M.D., is Commissioner of the U. S. Food and Drug Administration

January 5, 2012 Update

Many publications have described the drug shortage issue and its causes and potential remediation. The GAO recently published a report titled “Drug Shortages, FDA’s Ability to Respond Should be Strengthened.”The data provided in this report do not appear to be substantially different from those of other publications, including an earlier one from FDA. The GAO recommends that Congress consider establishing a requirement for manufacturers to notify FDA of any changes that could impact the supply of drugs they manufacture. This recommendation seems to be addressed in the interim final rule amending the existing post-marketing reporting requirements of 21 CFR314.81(b)(3)(iii) (see the Rx-360 Summary of this rule). Further, the GAO encourages FDA to develop information systems that will permit tracking and management of drug shortages.

News reports have announced that an interim final rulehas been published regarding amending the postmarketing reporting requirements, specifically those in 21 CFR 314.81.(b)(3)(iii) published as final on October 18, 2007. This addressses the need to notify FDA in advance when a sole manufacturer plans to discontinue manufacture of a “life supporting,life sustaining, or intended for use in the preventino of a debilitating disearse or condition”.

This interim final rule supports the Executive Order 13588 from October 31, 2011 that directs FDA to “take steps that will help to prevent and reduce current and future disruptions in the supply of lifesaving medicines…one important step is ensuring that the FDA and the public receive adequate advance notice of shortages whenever possible”.The changes put forth in this document add two definitions to the existing rule, one for “discontinuance” and one for “sole manufacturer”. The intent of these changes is to provide FDA assistance in the management of the dramatic increase in drug shortages. The definition of “discontinuance” has been expanded to include “…both temporary and permanent interruptions in manufacturing, if the interruption could lead to a disruption in supply of the product”. The FR announcement includes examples of situations that would trigger such a notification as well as those instances where no notification would be necessary. The definition of “sole manufacturer” is clarified to mean “…the only applicant currently supplying the U.S. market with the drug products.” It does not mean the sole NDA/ANDA holder.

There has been significant national news coverage in the USA of drug shortages, especially related to drugs used to treat cancer.

Rx-360 has previously presented and publicized that during shortages, opportunities are presented for noncompliant companies, unethical players and even criminals to enter the supply chain and introduce substandard, contaminated, adulterated and even counterfeit materials, often with tragic consequences. In fact, shortage of raw material in China was one of the contributing factors in the economically motivated adulteration of Heparin which led to numerous deaths in the USA and Europe.

With the current shortages of drugs in the USA, the Institute for Safe Medication Practices has issued a safety alert based on their survey of 549 hospitals, indicating widespread accounts of frustration, outrage, and serious compromises to patient care.

According to the press release from ISMP: "When critical medications become scarce and are no longer available through a hospital’s usual channels of distribution, unscrupulous gray market distributors have been quick to jump in with inexplicably obtained supplies of these drugs that they are more than willing to sell to healthcare providers at exorbitant costs. Capitalizing on the desperation of pharmacy directors and buyers, these distributors have been unrelenting in their quest to make huge profits by supplying hospitals with lifesaving medications that are otherwise unavailable."

The survey generated hundreds of comments from respondents "who feel unsupported by regulatory agencies that have not stepped in to control the gray market, betrayed by some pharmaceutical manufacturers or wholesalers who they presume may have sold medications in short supply to gray market vendors, perplexed regarding how gray market vendors know about pending drug shortages before hospitals do, outraged by the price gouging that accompanies the sale of these vital medications, and frustrated by the wasted time spent on unsolicited communications (telephone calls, emails, faxes) from gray market vendors."

The follow findings also come from the ISMP Survey:

About half (52%) of all respondents reported purchasing one or more pharmaceutical products from gray market vendors during the past 2 years. Most (80%) of these respondents told us that their purchases had increased in the past 2 years as drug shortages began hitting record highs.

Numerous respondents reported feeling pressured by physicians and hospital administrators to purchase medications from the gray market. Any resistance to the purchase, despite expressed risks, pegs the pharmacist as the “bad guy.” While some states have enacted regulations that require documentation of authenticity (pedigree) of any purchased pharmaceutical products, half (50%) of respondents in these states with pedigree laws still reported purchasing medications from the gray market during the past 2 years. Of these, only 35% reported always receiving the required documentation of authenticity.

In general, the most common reasons respondents did not purchase medications (48%) from gray market vendors during the past 2 years were: concerns with authenticity (74%), ethical concerns (66%), cost (69%), and concerns about the storage conditions prior to purchase (58%).

Among all respondents, only 23% told us they require documentation of authenticity from the gray market vendor before purchase.

Up to 12% of respondents reported awareness of a product authenticity issue, medication error, or adverse drug reactions associated with the use of gray market products in the past 2 years.

Numerous respondents made recommendations for improvement but until these actions are implemented, ISMP recommendations are summarized in Table 1 (below), which includes a series of actions developed by Premier to help organizations ensure a safe, reliable medication purchase. Readers are also referred to our October 7, 2010, newsletter article, "Weathering the storm: Managing the drug shortage crisis" www.ismp.org/Newsletters/acutecare/articles/20101007.asp for suggested actions, including a template of a failure mode and effects analysis to promote safe use of alternative drugs used during a drug shortage.

Table 1. Actions to Ensure A Safe, Reliable Medication Purchase

1

Understand the risks associated with purchases from the gray market, including the possibility that the drugs may be counterfeit, stolen, diverted, mishandled, and/or adulterated.

2

Develop a policy on how your pharmacy will deal with gray market vendors, including details regarding any exceptions that may be allowed.

3

Purchase supplies only from distributors that are an authorized distributor of record for the drug manufacturer (which are listed on the manufacturer’s website) or an otherwise appropriately licensed and Verified-Accredited Wholesale Distributor (VAWD) (which are listed on the National Association of Boards of Pharmacy [NABP] website).

4

Require any non-authorized distributors of record to provide a pedigree prior to or upon purchase of a product (which they are required to keep), and authenticate and track each transaction back to the manufacturer’s authorized distributors of record.

5

Keep a list of suspect distributors as a resource to check prior to making purchases.

6

Compare the package, label, and contents of products from a non-authorized distributors of record with the manufacturer’s original product. If differences are identified, question its authenticity.

7

Report any suspect suppliers and violations to pedigree laws to your State Board of Pharmacy, the FDA, the Federal Trade Commission, and other applicable law enforcement authorities.

Rx-360 also published an editorial calling for stricter criminal penalties for economically motivated adulteration, counterfeiting and other nefarious activities. The editorial stated "Looking at events over the past several years, it is clear - unethical individuals and criminals are present in the pharmaceutical supply chain. The reason for this growing phenomenon is simple “greed”. Unethical individuals and criminals have learned that selling substandard, adulterated or counterfeit medicines is highly profitable and involves very little if any personal risks." The entire editorial can be read at: http://www.rx-360.org/News/Rx360Newsletters/Rx360NewsNovember2010/EditorialStricterCriminalPenaltiesRequired/tabid/215/Default.aspx